Why an Australian farmland investment?

  • Low sovereign risk
  • Efficient supply chain
  • Secure land titles
  • Close to growing Asian markets
  • Land is still cheap compared to other Western Countries
  • Low cost producer – Globally competitive

Attractive risk / return metrics

  • Stable political situation and security of land ownership and land titles with a transparent and efficient pricing
  • Anglo Saxon legal system, no language barriers
  • Large and professional agricultural sector (12% of GDP):
    Australia is at the forefront of implementing new agricultural technology and has continued to achieve large efficiency gains
  • No government subsidies, reduced risk of future value destruction
  • Any foreign farmland investment under AUD 216 million does not need government approval
  • Large exporter strategically located to serve the strongly increasing appetite of Asian consumers

Australian farmland in perspective

  • 417 million hectares of land managed by agricultural businesses
  • Australian farmers export around 60% of what they grow and produced export earnings of AUD 32.5 billion in 2011
  • There are 307’000 people employed in agriculture with the entire value chain providing over 1.6 million jobs (accounting for 17% of the labor force)
  • Farm gate agriculture contributes 3% of Australia’s GDP or approximately 12% when including the entire value chain

Cost of land per tone of wheat production

Cost of land per tone of wheat production
Cost of land per tone of wheat production

An innovative way of assessing investment spend relative to output is to determine the cost of acquiring land in order to grow a tone of wheat. The chart above takes the average value of crop land in 2010 and divides it by the average harvest wheat yield over seven years (2005 – 2011). By taking a seven year period, it allows for any weather fluctuations to be account for. With the world wheat trade forecast to double by 2050